Distribution Agreements
Protect your commercial interests with clear, professionally drafted distribution agreements.
Whether you’re a supplier, manufacturer or distributor, having a legally sound distribution agreement in place is essential to protect your business, manage risk and define responsibilities. At Burgess Thomson, our experienced commercial lawyers advise businesses across Newcastle and the Hunter region on the drafting, review and negotiation of all types of distribution agreements.
We understand the commercial realities facing modern businesses. Our legal advice ensures your agreement reflects your goals, clearly sets out the rights and obligations of both parties, and complies with Australian law.
What Is a Distribution Agreement?
A distribution agreement is a legal contract between a supplier (or manufacturer) and a distributor that governs how products are sold, marketed and delivered. These agreements form the backbone of many supply chains and business expansion strategies.
By clearly outlining the roles, responsibilities and expectations of each party, distribution agreements help to reduce the risk of disputes, ensure commercial alignment and protect the intellectual property and reputation of your brand.
Types of Distribution Agreements
There are different forms of distribution arrangements depending on the level of exclusivity and control involved. The most common are:
- Exclusive Distribution Agreement
An exclusive distributorship gives a single distributor the sole right to sell your products in a defined territory or market. This prevents you from appointing any other distributors in that area and often prevents you from selling directly. An exclusive distribution agreement is often used where a supplier wants focused effort and loyalty from the distributor.
- Non-Exclusive Distribution Agreement
A non exclusive distribution agreement allows the supplier to appoint multiple distributors within the same region or market. This type of arrangement can offer broader market penetration and greater flexibility but may involve more complex coordination and competition between distributors.
At Burgess Thomson, we can help you determine which model best suits your business objectives and draft the appropriate agreement to reflect your intentions.
Key Terms to Include in a Distribution Agreement
A carefully prepared distribution agreement will clearly define the rights and obligations of each party and reduce the risk of ambiguity or misunderstanding. Common terms include:
- Products Covered: A precise description of the products being distributed.
- Territory and Exclusivity: Whether the arrangement is exclusive or non-exclusive and the geographical scope.
- Term and Termination: The duration of the agreement and how it can be ended by either party.
- Pricing and Payment Terms: Who sets the prices, how payment is handled and what happens in the case of non-payment.
- Marketing and Promotion: The distributor’s responsibilities in promoting and selling the products.
- Intellectual Property: Protection for the supplier’s trademarks, branding and proprietary information.
- Minimum Purchase Requirements: Commitments around volume or sales targets.
- Dispute Resolution: Clear steps for resolving any disagreements or breaches of contract.
Every business relationship is different, and at Burgess Thomson we tailor our advice to suit your commercial needs and risk appetite.
Why You Need Legal Advice for Distribution Agreements
Distribution arrangements often involve complex commercial and legal issues. Without proper legal guidance, you may face unintended obligations, loss of control over your product, or disputes that affect your ability to operate.
Our team can assist with:
- Drafting new distribution agreements
- Reviewing and advising on existing agreements
- Negotiating terms with the other party
- Resolving disputes under an existing agreement
- Advising on compliance with Australian Consumer Law and competition regulations
We ensure your agreement works for you—not just now, but as your business grows and evolves.
Why Choose Burgess Thomson?
With over 40 years of experience supporting businesses across Newcastle and NSW, Burgess Thomson is a trusted legal partner for companies of all sizes. Our commercial lawyers offer:
- Expertise in Contract Law: We understand the legal detail and commercial context.
- Tailored Solutions: No two distribution agreements are the same. We take the time to understand your business.
- Responsive Service: We’re known for clear communication and prompt turnaround times.
- Strategic Advice: We don’t just draft contracts, we help you achieve your commercial objectives.
Get Expert Help with Your Distribution Agreement
Whether you’re appointing a distributor or entering into an agreement as one, Burgess Thomson can guide you through the process and protect your business interests. From exclusive distributorships to non exclusive distribution agreements, we ensure your contracts are legally sound and commercially effective.
Let us help you structure your distribution arrangement with clarity and confidence.
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Frequently asked questions
What does Exclusive or Non-Exclusive Appointment mean?
An exclusive appointment means that a distributor is the sole distributor of the product. The distributor can be exclusively defined to a specific area (such as a state, country or region). These appointments can be beneficial for businesses that wish to have a distributor represent them in an area where that distributor has particular familiarity or market presence.
A non-exclusive appointment means the distributor is not the sole distributor but can operate alongside other distributors (potentially including the supplier or wholesaler). This can lead to competition within the distribution network.
Do distributors have minimum standards or performance?
In many exclusive distributive agreements, suppliers or wholesalers may require the distributor to maintain a level of performance. This performance is often on the basis of revenue targets or minimum purchase orders. These clauses help justify the exclusivity of the agreement. A minimum standard or minimum performance also helps codify the appointment of additional distributors if the sole distributors fails to meet the standards or performance in a specific area. Minimum standards should ideally be agreed upon by both parties. Determining the standards before the distribution agreement commences ensures that both parties are aware of the obligations they must fulfill.
Who is responsible for the marketing and promotion in the agreement?
The distributor, the supplier/wholesaler or both parties may be responsible for marketing and promotion. The supplier/wholesaler may require the distributor only use specific assets to market or sell the products for distribution. They may also stipulate that the distributor follow guidelines relating to branding. Distributors may also be obligated to undertake additional marketing or promotional activities.
Additional activities may include:
- Attending trade shows;
- Creating the marketing or promotional materials or;
- Attending to customer visits or training events.
If it is an exclusive arrangement, the distributor is likely to have more obligations regarding promotion and marketing. The obligations will also depend on a range of factors, including the nature of the products being sold, the amount of control the supplier or wholesaler wants to retain over their brand and their reputation in the market.